Gas demand for the Companys producing reserves continued to grow in the final
quarter of 2018, resulting from combined demand from the Kinyerezi-1,
Kinyerezi-2 and Ubungo II power stations, and the burgeoning demand growth
from industrial customers including Dangote Cement and Goodwill Ceramics.
This demand from off-takers collectively resulted in an average daily
production in Q4 2018 of 87.3 MMscf/d and for the month of December 2018 of
92.5 MMscf/d.

The average production for the full year 2018 was 83.2 MMscf/d; above the
Companys 2018 production guidance range of 65 - 75 MMscf/d and greater than
the Daily Committed Quotient (DCQ) of 80.0 MMscf/d, which the Joint Venture
Partners are required to supply under the Gas Sales Agreement with TPDC and
for the TANESCO-owned, Mtwara Power Station (ca.2.5 MMscf/d).

Commercial

The Company is pleased to inform shareholders that monthly payments for
November and December 2018 (post allocation of the Tanzania Petroleum
Development Corporation (TPDC) receivable, adjusted to reflect the Ziwani-1
exploration well and associated 3D seismic costs as previously announced) for
gas sales generated from the Mnazi Bay Concession of $3.0 million net to
Wentworth, have been received. Payments were received from both TPDC and
Tanzania Electric Supply Company Limited (TANESCO). The Company is pleased
to report that due arrears from TPDC and TANESCO, have steadily reduced over
the course of 2018 and now stand at three months for both off-takers.

As a result of the continued demand and sustainable payment landscape, the
Company has continued to meet and pay-down its debt commitments from free
cash-flow in 2018 and expects to be substantially debt free within the next
twelve months, with the final payment on its single outstanding loan facility
falling due in January 2020. As at 31 December 2018, outstanding debt was
$8.3 million (excluding $2.5 million corporate overdraft facility), with cash
of $11.8 million.

2019 Production Guidance and Outlook

Discussions continue with TPDC with regards reducing the Madimba gas receiving
facility export pressure from the current 92.5barg to ca.75barg. This will
allow for a sustained overall production rate and/or plateau period from the
current well stock, prior to installation of compression facilities. As
communicated by the Company on 3 October 2018, this is technically and
operationally feasible, has the potential to extend the production plateau by
c.18 months on a standalone basis and c.42 months including slickline and
chokes upgrade work; and would be immediately accretive to asset value.

As of 7 January 2019, the field was delivering ca.89.6 MMscf/d: 86.8MMscf/d to
TPDC with an additional 2.8 MMscf/d to TANESCO. Current demand for Mnazi Bay
gas is estimated by the Joint Venture Operator to be in excess of 95 MMscf/d.

For 2019, the Company anticipates further growth in gas demand with the
extension to the Kinyerezi-1 power plant which is expected to come online in
Q4 2019. This facility will initially require 5 MMscf/d and will build up
approximately 30 MMscf/d of gas requirement when fully commissioned over a
six-month period. Continued gas demand growth in 2019 is also expected,
primarily from the Dangote Cement Plant and other smaller industrial
consumers; adding an additional 10-15 MMscf/d to national demand needs by Q2
2019.

Wentworths operational activities in 2019 will include working with TPDC to
determine the optimal operating transnational pipeline inlet pressure for the
system and ensuring the maintenance of the current production plateau using
existing wells and infrastructure. The Mnazi Bay Joint Venture anticipates
conducting slickline and choke upgrade activities and will perform regular
pressure build up tests to further reduce uncertainty with respect to
in-place and recoverable gas volumes over the forthcoming year. These
activities will help to ensure that forecast production meets the Daily
Committed Quotient (DCQ) of 80.0 MMscf/d, which the Mnazi Bay Joint Venture
is required to supply under the Gas Sales Agreement with TPDC and for the
TANESCO-owned, Mtwara Power Station (ca.2.5 MMscf/d), without risking a
shortfall in 2019 and beyond.

For 2019, full year average daily production, is expected by the Company to be
in the range of 75 to 85 MMscf/d in order to sustain the current plateau rate
from the existing five producing well stock. The Company will continue to
update the market as new sources of demand materialise, in addition to
operational updates on the asset.

Mozambique

Further to its announcement dated 17 December 2018, the Company is in the
process of relinquishing the Tembo Appraisal License with a planned effective
exit date of 30 April 2019. The Company continues to assess suitable upstream
opportunities in country, through its strong relationships with ENH and INP.

Eskil Jersing, CEO, commented:

We are pleased that the Mnazi Bay asset has successfully ramped up to
deliver sustainable and
material production rates, with minimal downtime in 2018. The Mnazi Bay Joint
Venture continues to work with all stakeholders on the four key value
catalysts, referred to in the 3 October 2018 RNS, to ensure that we derive
the maximum possible production value from the Mnazi Bay field . We look
forward to updating the market on our progress in 2019, in a rapidly
developing demand-led landscape. With the intended relinquishment of the
Tembo appraisal licence in Q2 2019, our efforts this year will be primarily
focused on maintaining efficient operations at our Mnazi Bay asset,
strengthening our financial position and executing on our M&A led growth
mandate.

An operational update from Wentworth this morning where all appears to be going very well at Mnazi Bay in Tanzania. Gas demand grew in the 4th quarter from both power stations and industrial customers so the quarter showed gross production of 87.3 MMscf/d with December recording 92.5 MMscf/d. The year was 83.2 MMscf/d easily beating guidance of 65-75 and this year has been set at 75-85 MMscf/d.

Arrears have been ‘steadily reducing’ in 2018 and now stand at only three months with payments received for November and December, the company expects to be debt free in twelve months time. At the year end the company had debt of $8.3m not including the overdraft facility and cash of $11.8m.

Local demand near Mnazi Bay is clearly large and growing and the company should be able to continue to do well, all the time managing the technical aspects of the field and the assorted clients to sell to. With the departure from the Tembo licence in Mozambique this only serves to accelerate the M&A ‘mandate’ that Eskil Jersing has arrived with and the market eagerly awaits his stepping up to the plate.

I melding i dag skriver de om Mozambique
Further to its announcement dated 17 December 2018, the Company is in the process of relinquishing the Tembo Appraisal License with a planned effective exit date of 30 April 2019. The Company continues to assess suitable upstream opportunities in country, through its strong relationships with ENH and INP.

Wentworth Resources Plc (LON:WRL) has highlighted the boost seen at its Mnazi Bay during the fourth quarter of 2018 thanks to rising demand in Tanzania.

The gas producer, in a trading update, noted the growing demand for its gas coming from power stations and burgeoning demand from industrial customers such as Dangote Cement and Goodwill Ceramics.

It saw Wentworth achieving an average production rate of 87.3mln cubic feet of gas per day over the quarter, with the figure for December alone measuring 92.5mln cubic feet per day.

For the whole of 2018, the production rate averaged 83.2mln cubic feet per day which was comfortably above the guidance range of 65-75mln cubic feet per day and was also above the company’s committed quotient (set at 80mln) under its gas sales agreement with state firms TPDC and TANESCO.

READ: Wentworth Resources in prime spot in Tanzania
"We are pleased that the Mnazi Bay asset has successfully ramped up to deliver sustainable and material production rates, with minimal downtime in 2018,” said Eskil Jersing, Wentworth chief executive.

“The Mnazi Bay Joint Venture continues to work with all stakeholders on the four key value catalysts, referred to in the 3 October 2018 RNS, to ensure that we derive the maximum possible production value from the Mnazi Bay field.

Jersing added: “We look forward to updating the market on our progress in 2019, in a rapidly developing demand-led landscape.

“With the intended relinquishment of the Tembo appraisal licence in Q2 2019, our efforts this year will be primarily focused on maintaining efficient operations at our Mnazi Bay asset, strengthening our financial position and executing on our M&A led growth mandate."

Financial update
Wentworth told investors that it has received its monthly payments for November and December which, after adjustments for previously announced costs, amounted to US$3mln net.

It added that due arrears from TPDC and TANESCO have steadily reduced over the course of 2018, and, now stand at three months for both off-takers.

The company noted also that it has continued to meet and pay-down its debt commitments from free cash-flow in 2018.

It expects to be substantially debt free within the next twelve months – the final payment under its loan facility falls due in January 2020.

At the end of December, the company owed US$8.3mln and it had US$11.8mln of cash.

Looking at demand and production for 2019
Wentworth highlighted that talks continue with TPDC over the possibility of reducing the pressure in the gas pipeline and, if agreed, that would allow for a sustained overall production rate or plateau from current well stock – before compression facilities are installed.

At 7 January, the operation was yielding a production rate of 89.6mln cubic feet per day while demand is currently estimated to be above 95mln cubic feet.

Wentworth said it expects further demand growth over the course of the year, given planned extensions to the Kinyerezi-1 power plant which is initially due to require 5mln cubic feet per day from the fourth quarter ramping up to 30mln when fully commissioned in the subsequent six month period.

It also anticipates demand growth from industrial customers.

The company currently has five gas production wells and it expects full-year production between 75mln and 85mln cubic feet per day.

Broker upbeat, repeats ‘buy’ recommendation
Broker Peel Hunt repeated a ‘buy’ recommendation for Wentworth’s AIM-quoted shares with a 44p price target suggesting more than 100% from the current price of 20p per share.

“Wentworth will be largely debt-free by YE19, in-line with our expectations, as regular cash receipts continue and the business successfully de-levers,” the broker said in a note.